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MBL: New Fluorescent Protein

The research group of Atsushi Miyawaki (宮脇敦史) at Riken has discovered a novel fluorescent protein that changes color from green to red under UV light. The protein can be used just like GFP to mark cells for confocal microscopy.MBL will market the new protein. It is hoped that it will find wide application by pharmaceutical companies which have been reluctant to use GFP and its derivatives because of the great license payments required.The finding has been published in PNAS, Sept. 23, 2002.

Contributed by Armin Rump
(September 30th, 2002)

Tsukishima: Ethanol from organic materials

Tsukishima Kikai has announced it will build a prototype plant to produce ethanol from wood and other organic materials which accumulate as waste in the construction and agricultural industries. Tsukishima will use a fermentation porcess based on genetically engineered bacteria to produce 1 ton ethanol from 4 tons of wood every day. The experimental plant will be located within Tsukishima's environmental process development center in Ishikawa/Chiba. Orders to construct biomass processing plants for other companies will be taken from 2004. Tsukishima's partner Marubeni owns a license to patents form the Univerisity of Florida to use a strain of E. Coli (KO11) which has an additional pathway (from Pseudomonas) to convert C5 sugars to ethanol. (Wood has a particularly high content of C5 sugars in hemicellulose polymers. It is therefore not well suited for the traditional C6 fermentation with yeast.) With the liberalization of ethanol sales scheduled for 2006, the hope is to catch an early start in the business of selling ethanol for industrial use and as an environmentally friendly fuel additive.

Nakano Suten (中埜酢店), owner of the well-known Mitsukan vinegar brand, has deciphered the genome of acetobacterium. That makes Nakano the third Japanese company after Kyowa Hakko and Takara Bio to complete a genome sequence on its own.

Contributed by Armin Rump
(August 26th, 2002)

Ministries of Agriculture, Environment: Towards biomass utilization

The Japanese government is considering how to push biomass utilization technologies which will use organic waste and plant materials to produce energy and fertilizer, substituting for fossil fuel and thus contributing to a reduction of greenhouse gas production.Presently, most organic waste in Japan is either burnt or burried. The Ministry of the Environment is calling for such waste to be fermented to produce methane, which can be used in fuel cells. It is planning to support waste disposal companies with 50% subsidies on investment costs for biomass utilization facilities. Local governments which build model plants will get 25% support. Aiming for a distributed network of biomass power stations and a sustainable society, the ministry will fund research and development projects.The Minstry of Agriculture, Forestry and Fisheries (MAFF) will support re-use of waste from food processing companies, producing fertilizer, as well as recycling of coal and various organic wastes. In view of the proceeding liberalization of the energy market, parliament is drafting a law that will oblidge all power companies to generate a minimum fraction of their energy by regenerative means.

A group of leaders in administration and business will visit Germany this November to study state-of-the-art environmental biotechnology in the context of a functioning recycling infrastructure. Details...

Katsuhito Morishita (森下竜一) of Osaka University and Tadashi Tanabe (田辺忠) at the National Circulation Center have developed a gene therapy approach to rapidly restore blood circulation in mice by introducing two genes, HGF (hepatocyte growth factor) and prostacyclin.While HGF induces the growth of new blood vessles, prostacyclin prompts blood vessles to grow in diameter. Rabbits got the number of blood vessles in their feet reduced an then received an intramuscular injection of the vectors carrying the two genes. Blood flow recovered by 80% in 2 weeks (as opposed to 4 weeks with HGF only), and the number of blood vessles increased 4 fold (2.5 fold for HGF only). Next, experiments are planned in monkeys and then clinical trials to treat circulatory insufficiencies in limbs due to occlusive arteriosclerosis and diabetes.One week earlier, it had been reported that Morishita's company, AngesMG (formerly called Medogene) is cooperating with Daiichi Pharma in clinical trials for HGF. Daiichi will also sell HGF gene therapy overseas. With HGF gene therapy trials in progress and prostacyclin as a drug already approved, it is expected that the clinical trials of the new combination gene therapy will swift.

Mitsui Trading and Japanese are setting up a joint genome research venture in order to analyze "Asian" features of the human genome. Several types of cancer which have high occurence in Asia are the first target of analysis, research into hyperlipemia and high blood pressure will follow later.The research company will be set up inside a hospital in Singapore. Singapore was chose because the city-state has already assembled a number of biotech companies, several of which are focussing on Asian genome analysis, and synergies can be expected from cooperaion and networking.The new enterprise will be called Pharmalogicals Research. 48% of capital come from Biostar, a daughter company of Mitsui in Singapore. Another 48% are invested by Chugai Pharmaceuticals, which is part of the Roche group of Switzerland since October 2001. Roche is thus adding an Asian leg to its European and American genome analysis network. The remaining 4% of capital come from Jitchuken (実験動物中央研究所), and experimental animal company from Kawasaki. Pharmalogicals Research's president will be recruited from Biostar.

A research team of Kyoto University and Osaka University has found that gene therapy with Hepatocyte Growth Factor (HNF) can cure diabetes in model mice. HNF was repeatedly transfected into leg muscle by electroporesis. As a result of the increased concentration of HNF in the blood stream, cells inside the pancreas appear to have transdifferentiated into beta cells which prodce insulin.The experiment will next be tried in dogs.

The a Japanese Ministry of Education and Science (Monkasho) has approved a project to produce huaman embryonic stem (ES) cells for research from embryos left over from fertility treatment.Toshio Nakatsuji (中辻憲夫), professor at the Research Institute for Regenerative Medicine Kyoto University. Kyoto University plans supply ES cells to research institutes in the country free of charge starting next year.Most advanced countries have gone through a thorough ethical debate which lead to legal frameworks for ES research. In general, countries of protestant tradition, i.e. the anglophonic hemisphere, has adopted a pro-research stance, while catholic tradition lead to stricter laws. Asian countries which are free of the religious leighweight continue taking a pro-research or pro-technology stance. In Japan, critics say, a wide public debate is avoided and a case-by-case approach is taking instead, guided less by its own tradition than following the US example.

ES rules in Leading Countries

Country

Legislation

Britain

Production allowed even for therapeutic purposes from cloned human embryos

France

Production illegal

Germany

Production illegal but import allowed

USA

New production illegal, but research witha few pre-existing lines allowed

Pfyzer has announced its intention to standardize and synchronize worldwide drug develpment. Partly due to strict regulations in Japan, it is common for drugs to be carried through clinical trials and approval first in the USA and Europe and only later in Japan. There are examples of drugs which went on sale in Japan with a 10 year delay.Pfyzer hopes it can synchronize global drug development to reach the market at the same time in Japan, Europe and the US by 2007. Its first candidate drug to be developed globally will be treat postmenopausal problems such as osteoporosis, hyperlipidemia and propensity to breast cancer. In Japan, about 300 patients will be involved in the clinical trials. Worldwide, 7500 patients in 33 countries will participate.Besides streamlining the development process and enabling 24hour opeations through bridging time zones, worldwide standardized testing will shead more light on how drug response depends on ethnicity. It also ammeliorates the aggrevating shortage of test persons in Japan. Therefore, other pharmaceutical firms have taken similar initiatives on a smaller scale: Banyu (subsidiary of Merck) is running global trials to find new indications for the use of an anti-hypertensive agent, Daiichi is developing a new drug agains unstable angina worldwide.

Intec Web and Genome Informatics (W&G, Tokyo) is cooperating with Genesance Pharmaceuticals (Connecticut) to analyze the genetic variation in clinical trial data of pharmaceutical companies. The hope is that a drug which failed in clinical trials because it has an undesired side effect in one part of the population can still be developed as a drug for that part of the population which does not show the side effect if the side effect can be associated with a genetic variation, so that the occurence of the side effect can easily be predicted from the patient's genome. Moreover, association of a side effect with a genetic variation may shed light on the mechanism how the drug causes the observed side effect. Genesance maintains a database of genetic variation and has already obtained contracts from Johnson&Johnson, AstraZeneca and Pfyzer. Major pharmaceutical companies in Japan have started developing drugs based on genome data, but none has yet integrated the analysis of genetic differences into drug development. W&G's bioinformatics business focusses on data mining and function prediction from protien sequence data. W&G has therefore established cooperations with major pharmaceutical companies in basic research, particularly target identification. W&G's aim in the present cooperation is to expand its service to later stages in drug development in order to develop into a one-stop shop for bioinformatics services.

The annual meeting of the Molecular Biology Society of Japan is a large scientific meeting with approximately 2000 presentations (talks and posters). Just about every Japanese academic life science laboratory presents its progress here, while foreign attendance is close to zero. Here is a very brief report about the more interesting presentations I attended.Please excuse the brevity, much may not be comprehensible to non-specialists. The suffix "dai" stands for "University" (Japanese: Daigaku). Due to my personal research interest, this report has a strong bias towards hematopoiesis and stem cell research.s

Hematopoiesis, Neuroscinece, Stem Cells

Hideyuki Okano, Keio:Neuronal stem cells from nestin-GFP mice were transplanted into monkey spinal cord. Lesions in monkey spinal cord were regenerated and motoric behavior recovered. Important: Transplantation must occur within the post-accute inflammatory phase, 12-36h after the lesion, otherwise only astrocytes, no neurons are generated. It is thought that a moderate dose of inflammatory cytokines creates a favorable environment for generation of neurons. Human trials are in preparation.

Yayoi Toyooka, Ryuko Akasu, Mitsubishi Seimeiken (Mouse transgenesis: Sperm from ES)Vasa is an RNA biding proteins (target unclear) which is specifically expressed in germ cells of the mouse. GFP was knocked into the Vasa locus of ES cells and the heterogenic ES cells differentiated to embryoid bodies. 0.4% of cells were found to express a low amount of vasa.In mouse E4, the generation of germ cells is induced in cells of the epiblast by a BMP4/BMP8b signal from a group of cells in the extraembryonic ectoderm. Co-culture of ES cells with extraembryonice ectoderm cells from E4 embryo increases the rate of Vasa+ cell production to 1-2%. BMP8b and BMP4 transfected into M15 cells synergistically increase the appearance of Vasa+ cells in co-culture, but recombinant BMP proteins allone have no effect. Smad1 appears to upregulate Vasa expression (Smad1 k.o. mice show a defect in germ cell generation).

Toshio Watanabe, Tohokudai:CD148 is a single transmembrane protein with FN3 repeats ouside and a tyrosine phosphatase domain inside the cell. It is expressed on blood cells and can induce terminal differentiation in erythroleukemic cells.CD148-dominant negative mice were genearted by knocking GFP into the cytoplasmic part, replacing the tyrosine kinase domain. Blood cells in the yolk sac seem to be normal at E9.5, mice die apparently because of a defect in the generation of blood vessles.

Toshio Suda, Keio/Kumamoto:1. Tie2 (a receptor of VEGF) binds to fibronectin and may be important in cell adhesion.2. Bone marrow Tie2+ Hoechst 33342 side population cells can generate not only blood cells and endothelial cells but also smooth muscle actin positive cells when cocultured with stroma cells.3. QL1 deficient mice do not develop smooth muscle cells and therefore die at E9.5 because of defective blood vessles. QK1 is an RNA biding protein, its mechanism of action in myelogenesis is unclear.

Tadayuki Akagi, Masayuki Usuda, Takashi Yokota, U. Tokyo Ikaken:The LIF - STAT3 pathway promotes self-renewal of ES cells. On a cDNA array, several genes upregulated in self-renewing ES cells as opposed to differentiating ES cells were identified and may be target genes of STAT3.sZfp57 is a zink finger protein which interacts with Oct3/4 to maintain self-renewal of stem cells. Strangely, overexpression of either Zfp57 or Oct3/4 or because these factors need to be in balance with additional unknown transcription factors.Eed (embryonic ectoderm development) is another RNA upregulated in self-renewing ES cells. Eed binds to Ezh2, YY1, HDAC and Rex 2 to form a complex that binds to DNA polycomb response elements, and at the same time can deacetylate histones opening up target genes for transcription.

Shinichi Nishikawa, Kyoto:GATA-2 has 2 promoters, the lower one driving expression in a variety of tissues, the upper one specific for hemangioblasts. This promoter specificity was demonstrated by generating transgenic mice with GFP under the GATA2 promoter.E11 GATA2-GFP mice have a green AGM region, particularly aorta. In culture, CD45- green cells give rise to CD45+ floating cells which lose their green color soon after they are generated. Retroviral expression of GATA-2 in AGM culture prevents the production of CD45+ floating cells.

Hiroshi Takahashi, Mitsubishi Seimeiken:Dorsal root ganglia contain two main kinds of sensory neurons. Large neurons express trkA, the receptor for NGF, and send their axons all the way through the dorsal to the ventral part of the spinal cord, where they connect directly to motor neurons. The smaller neurons express trkC, the receptor for NT-3, and neuropilin, the receptor for Semaphorin D. SemaD generates a repelling signal in the ventral part of the spinal cord. Therefore, the NT-3 responsive smaller fibers project to interneurons located in the dorsal part of the spinal cord.

Taga, Kumamoto U.:Neuroepithelial cells can be maintained as stem cells in culture with FGF-2 but differentiate to neurons, astrocytes and glia upon factor withdrawl. Hesr1 is a zink finger transcription factor similar to Hes1 which was found to be expressed specifically in neuronal stem cells by DNA chip hybridization. In situ hybridization confimed expression in neuroepithel. Hesr1 was shown to be a target of SMAD transcription factors: It is activated by BMP2 and FGF2 but inhibited by the inhibitory SMAD7, an inhibitor of SMAD signalling.Hesr1 appears to inhibit differentiation of neuronal stem cells and also serves as a fate switch to generate astrocytes rather than neurons by inhibiting the MAP kinase pathway.

Biochemistry

Takuya Ueda, Todai (Pure System):Basic technology: Protein synthesis from DNA templates with 31 purified protein factors plus ribosomes (E.coli system). Yield: in 2 hours, 200ug/ml purified protein.By adding shaperone proteins such as GroEL, the system's difficulty to fold some proteins correctly is being addressed.By stopping the reaction with both RNA and peptide sticking to ribosome, the sequence information can be made stick to the peptide, so that the system can be used for peptide evolution experiments, similar to phage display. A problem is that the ribosome is bulky. So, it does not appear supperior to phage display yet.

Genomics and Bioinformatics

With Tomita as a head, the following researchers will be the main players at the new institute:s

Mitsuhiro Itaya, Mitsubishi Seimeiken/Keio (Genome Design):Bacillus subtilis, when it expresses a competence factor, can take up DNA from outside and integrate it into its genome by homologous recombination. This feature can be exploited to manipulate its genome in a rational way:

Koji Kyoda, Keio/Kitano Project:Bacterial stress response: Pathway modelling form gene expression data of mutants.By mutating each gene and analyzing genome expression on a DNA chip, a minimal chart of biological pathways can be inferred. "Minimal" means that redundant pathways are not detected. Unfortunately, using this pathway chart to re-model the organism's metabolism is not feasible.

Technologies

Yoshinobu Baba, Tokushimadai:1. Electrophoresis on a chip: 6s to separate 3 DNA fragments (a few fl, 1mm running length)2. DNA Single molecule manipulation: 10Hz AC stretches out long DNA strands (such as chromosomes), beads and light beams can be used to transport (pull) a single DNA molecule under a microscope. Single DNA molecules were shown "crawling" through silicone microstructures.

BRIEF NOTESpectrum confocal microscopy is a new technology which can tell apart two fluorescent dies even if their spectra overlap - for example, GFP from YFP.AAV (adeno associated virus) is said to be a safe vector for gene therapy (Parkinson).

Contributed by Armin Rump
(December 09th, 2001)

Takeda implements speedy strategic decision making

Although Japanese pharmaceutical companies are small compared to their global competitors, is generally said that they have two strong points over their global competitors: One is a large war chest of money in the bank, waiting to be invested into new technologies. The second is the personal/family ownership of companies, which lends it self to speedy, undisputed decision making without the need to consult shareholders. In order to profit from this second strength, i.e. to implement speedy decision making in a top-down manner, Taisho Pharmaceuticals has set up a "general strategy council", headed by company's president and owner, Kunio Takeda (武田国男), along with Masahiko Fujino (藤野政彦), chairman of the board, and vice president Hideyuki Nagasawa (長沢秀行). The council will convene weekly to identify focal points of R&D and investment, to decide on outside cooperations and to oversee intellectual property strategy. Previously, general strategy had emerged from discussion between department heads. Although Takeda has seen record results due to its well selling diabetes and ulcer drugs, its pipline is said to be thin beyond 2005. The new council aims to tackle this problem by focussing the company.

[Note added in proof: The merger was called off two months later. The strong culture and pride of both companies were said to be incompatible.]Taisho Pharmaceuticals and Tanabe Pharmaceuticals announced to merge their operation by setting up a holding company, Taisho Tanabe Pharma Group, in April 2002. By merging, the companies hope to remain competitive in the post genome era which requires increasingly large R&E budgets. The merger is seen as a reaction to large global mergers (Pfyzer with Warner Lambert and Glaxo with Smithkline, most recently), and to the push of global players into the Japanese market. (Alan Boots of Pfyzer has declared his intention to become No.1 or 2 in Japan by 2004.) Similarly, in Japan, Welfide will merge with Mitsubishi Tokyo Pharma on October 1st to create the 9th largest pharmaceutical company in the country.

Taisho Tanabe will be headed by Taisho's president, Akashi Uehara (上原明), and the board will be chaired by Tanabe's president, Toshio Tanaka (田中登於). The board of trustees will be made up of an equal number of members from Taisho and Tanabe. Tanabe is a company of long standing. It was founded in 1876 in Osaka. Tanabe's market capitalization is 3.4exp10 Yen, annual sales are 2exp11 Yen, net profits are 3exp9 Yen (March 2001 figures) and it employs 5000 people. Core business are its cardiovascular and respiratory drugs. Taisho, located in Toyoshima, a part of Tokyo, was founded in 1912, has a market cap. of 3exp10Yen, annual sales of 2.7exp11 Yen, net profits of 3exp10 Yen and also employs about 5000 people. It is the national market leader of over the counter drugs, with its energy drinks and hair growth lotion selling best. Consequently, the new company will feature two main divisions, clinical therapeutics (focusing on the circulatory system) and and non-prescription drugs.

In a follow-up feature on Sept. 25th, Nikkei Shinbun examines the backroud of the merger. Taisho's house bank has long been Sumitomo bank through a personal friendship between Ueda and Shozo Koborita (故堀田庄三), a former director of Sumitomo. Tanabe has been close to Sanwa Bank. It is therefore of great surprise that the merger was masterminded by Tokyo Mitsubishi Bank, the same bank that initiated the Mitsubishi Pharma - Welfide merger. In fact, many analysts believe that Tokyo Mitsubishi Bank may have larger plans: The Taisho-Tanabe merger produces only little synergy as their combined prescription drug sales remain at 2.3exp11 Yen, far behind Takeda. Also, the number of new products in Taisho-Tanabe's pipeline is said to be unimpressive. Another merger with Mitsubushi Tokyo/Welfide, however, would bring pharmeceuical sales near Takeda and create a national pharmeceutical powerhouse.

Sales ranking of Japanese pharmaceutical companies (1exp11 Yen, March 2001)

Fukashi Murai, CEO of PostGenome Institute Inc., gave a presentation on his company's technology of protein synthesis with purified proteins at a semiar organized by BLS. The technology, published by Takuya Ueda's group (University of Tokyo) in this month's issue of Nature Biotechnology, uses ribosomes plus the entire translation machinery of E.Coli as recombinant, His-tagged proteins, tRNAs, amino acids etc. to synthesize proteins at the hundred ug/ml scale. Addition of RNA polymerase allows proteins to be synthesized from a DNA vector using the T7 promoter. The reaction product is subjected to ultrafiltration to remove ribosomes and run on a nickel column which retains the His-tagged proteins, yielding purified protein in less than two hours time. Murai hopes that reconstituted protein synthesis will become a central tool in structural and molecular biology just as reconstituted DNA synthesis in the form of PCR has become a standard technique. He is presently looking for licensees and partners overseas to develop and market the technology.

Contributed by Armin Rump
(August 04th, 2001)

Genome Databases Gain Popularity

Kyowa Hakko has signed up to use Compugene's genome analysis database, which is based on pubic domain sequence data, while Yamanouchi signed a five year contract with Celera. Ezai, Sumitomo Pharma and Sankyo gained database access with Incyte Genomics - Sankyo on top of a previous agreement with Gene Logic, Maryland. Evidently, Japanese pharmaceutical companies are step by step turning to genomics tools to speed up their research. Celera has recently established a Japanese office, and Incyte did so some time ago already, to take advantage of this trend.

Celera Genomics announced to open office in Japan to run its Asia operation. In addition to selling access to its genome and SNP database, Celera Japan will offer added value through research cooperation for drug target identification. Celera sees demand for such service because Japanese pharmaceutical companies do not have the size and budget to match the genome discovery efforts of their Western counterparts. Celera Japan will be headed by Richard H. Lussier, director of Applied Biosystems Japan and will have a staff of 4 people initially. It is possible that Celera's move may prompt its competitors in Japan, Takara and Hitachi, to revise their genome discovery support business.

010710 University Technology Transfer is Accelerating

Hideo Namiki, director of Waseda University's technology licencing office (TLO), announced the first licensing deal in the 10exp8 yen range. Subject of the agreement is a cobalt-nickel-iron ligation which allows higher density magnetic recordings, to be used in hard disk drives. Technology licensing fees had been stuck in the 10exp7 Yen range. For the Waseda TLO, founded in April 2000 as a relative late comer, it was the 10th licensing deal. Waseda sees its TLO as the main pillar of a wider strategy to start up high-tech companies and thus capitalize from the technology developed in its laboratories in a time where tuition fees are predicted to decline. A high tech business incubator is being built on campus, inquiries for research projects and cooperations are welcome form outside companies (the above-mentioned license came out of a research cooperation with NEC), and an effort is made to raise the venture spirit in faculty and students alike. Waseda's ambition is to create 100 spin-out companies by 2001, one tenth of the 1000 university ventures the Japanese government (METI) envisions to raise and support with 4exp10Yen over the same period.

REDWOOD SHORES, Calif. (AP) - Computer software giant Oracle Corp. announced Wednesday it is forming an alliance with two biotechnology companies to map out human proteins and how they interact. The venture with Salt Lake City-based Myriad Genetics Inc. and Tokyo-based-Hitachi Ltd. - to be called Myriad Proteomics - hopes to complete its catalog by 2004. Myriad Genetics is putting up $82 million worth of technology and will own 50% of the joint venture. The other half interest will be split among Oracle, Hitachi and Switzerland-based Friedli Corporate Finance, which are providing a collective $85 million in cash and $18 million in additional technology. Redwood Shores-based Oracle previously has provided computing tools for biotech research - most notably for Celera Genomics Group's human genome project - but this is the first time the software giant has put money into the sector.

Contributed by Armin Rump
(April 05th, 2001)

Blood Vessel Regeneration

Under the leadership of Hiroaki Matsuhara, a team of researchers from Kansai Medical University and Kurume Medical University has successfully concluded clinical trials of a novel therapy for blood vessel regeneration. 11 patients who were suffering from obstructive arteriosklerosis and insufficient blood supply in the foot as a consequence of diabetes or hyperlipidemia were treated with autotransplanted mesothelial stem cells. The cells were obtained from 500ml of bone marrow taken from the patiient's hip region. Stem cells were isolated, treated with Hepatocyte Growth Factor (HGF) and injeted into the patient's calf muscle. New blood vessles grown from the stem cells improved blood flow in the foot 2.3fold on average. An estimated 100 000 patients per year in Japan are surgically amputated a limb due to obstructive arteriosklerosis. The researchers have submitted the treatment to the Ministry of Health and Welfare for approval of coverage by the national health insurance. Furthermore, clinical trials for treatment of myocardial infarction are under way. An different group of researchers at Osaka University will start HGF gene therapy treatment for obstructive arteriosklerosis in the near future.

Fuji Pharmaceuticals, a major generic drug manufacturer located in Toyama, is building a new plant to manufacture injectible hormone drugs. The plant will double Fuji's capacity for to treat infertility and menopause-related symptoms, currently 1.6exp7 doses a year. Fuji's previous aim to expand its oinment and pill business has run into cheap competition, and such products will be increasingly outsourced to Thai generic drug manufacturers. Hormone drugs, Fuji's strong point (70% of sales), are more difficult for competitors to produce. Fuji will increase its R&E budget for next year by 50% to 4.3exp8 Yen in an effort to develop new gynecological drugs.

Biogen, one of the most successful US biotech companies with 8exp8 US$ sales from 4 drugs in 1999 (3exp8 US$ pretax profits), is completing its tricontinental product development plans by establishing its Japanese branch. As head of its Japan and Asia operations, Biogen could recruit a director from Mitsui Trade, Toshio Nakata. Biogen Japan will conduct clinical development of Biogen's drugs. As Interferon beta, Biogen's blockbuster drug, has already been licensed to Genzyme Japan for clinical development, Biogen Japan's first project may likely be AMEVIVE, an inhibitory antobody agains CD2, an immune signalling receptor on T cells. AMEVIVE is presently in stage 3 clinical trials in the US and promises autoimmunity treatment directed specifically agains activated T cells. Biogen presently has 20 candidate drugs in clinical development and hopes to double that number over the next year. One example are humanized monoclonal antibodies agains multiple sklerosis and Cron disease, in cooperation with Elan, an Irish venture which developed the technology platform for antibody humanization. Adress: Biogen Japan, Tokyo Chiyoda Marunouchi 1-1-3, AIG 9F, tel. 03-5228 5201

Takeo Matsumoto, an entrepreneur who previously worked for NOF corporation in R&D as well as licensing, set up a new venture fund to invest into biotech startups. Unusual in Japan is that the fund, Biotech Healthcare Partners(BHP), invests in seed companies before they have a product line. Matsumoto's long experience in the industry enable him to advise his client companies and to get involved in their Management. Matsumoto aims to carry out 15 investments over the next five years. The fund's capital totals 3exp9 yen, 2/3 of which come from New Business Investment Co., an investment bank affiliated with the state-run JDB (Development Bank of Japan, 日本政策投資銀行). The other third was contributed by Orix Capital, Shinko Capital, Kyorin Pharmaceuticals, Sumitomo Pharma, Tokai Medical Products, Japan Tobaco, Mochida Pharmaceuticals, Yasuda Industry Investment, and Tokyo Small Enterprise Investment Promotion (東京中小企業投資育成), which also owns the incubator building in Shibuya that houses BHP. For DBJ, this is the second time to invest in a venture fund. (The first investment was in an IT venture fund.) It hopes that private investors will follow to inject life into the Japanese biotech VC field which suffers a serious shortage of lead investors who understand the technology and calculate in the long time frame required to market biomedical technology.

Taisho Pharmaceuticals is expecting less profits in the fiscal year ending in March 2001 than the previous year. Taisho's "Lipovitan D" health drink palette saw 4% less sales in pharmacies but a total increase of 2% through new distributors such as convenience stores. "Re-Up", a hair tonic which was a great hit last year, has also slumped. At the same time, Taisho has been boosting R&E expenditure 42% to 33exp9 Yen. The year is expected to end with a 72exp9 Yen operating profit, a 15% decrease, and a net profit of 35exp9 Yen, -32%. Another company, SS, is expecting a 3% decrease in profits, 11exp9 Yen in total. With vitamin drinks (+9%) and influenza drugs are selling well, SS has invested to establish its brand name and products, increading advertisement expenditure by 13%.

The US government has made 'nanotechnology', engineering at molecular scale, a strategic priority of research and development. Toray Industries, traditionally a polymer materials company, is setting up a team to do research into materials for nanodevices, such as electrical microfilms and DNA-containing materials, in order to be ready when the potential market will emerge in 5-10 years time. The 20 members of the new research team will be recruited from Toray's medical research center at Kamakura and its electric information materials research center in Otsu (電子情報材料研究所 神奈川県大津市).

In recent years, Japanese pharmaceutical companies have had their margins squeezed by dwindling compensation policies of the national health insurance, as well as by pressure form foreign players on the deregulating market. At the same time, food and beverage companies have suffered from the lack of private consumption in the long-lasting economic slump. Both food and drug companies are now targeting the market for 'health foods' or 'functional foods', a market that is growing rapidly, has higher profit margins than traditional foods and is free of price controls. The convenience store chain 7-eleven has been the pioneer in bringing health foods from pharmacies to the supermarkets by putting up shelves with Fancl health food products in its stores. Customer acceptance has been strong throughout. Nichirei is selling every third of its low-calory lunch boxes for diabetics to women who want to stay slim. Nihon Ham is using its baseball team to market sports food, Ajinomoto is taking its energy drinks from sports shops to supermarkets, and Yamanouchi does the same with its funcional foods assortment thus far only sold in pharmacies. Otsuka Pharmaceuticals, on the other hand, is educating pharmacy owners and health specialist about its functional foods with great success. Competitiors hope to gain an edge by employing the latest technologies to develop better functional foods: Kyowa Hakko, a company with vast expertise in bacterial fermentation, is setting up a new company, Zanagen, in Kawasaki, a joint venture with Mitsui Joho Kaihatsu, an IT company. Zanagen will analyze genomes of marine microorganisms in order to gain knowledge to develop better health food products. Ajinomoto has recruited Micho Takahashi, a professor at Tokyo University, to head a research team to investigate symptoms of common diseases such as obesity, high blood pressure and diabetis, from a neurological and physiological perspective, in order to design new foods. Meiji has already landed a hit with its 'LG21' yoghurt. In a screening thus far only used in drug development, it isolated its a lactobacillus strain which suppresses pyroli bacteria, which can cause gastric ulcer. The yoghurt, introduced in March 2000, is expected to reach 7exp7 yen sales in its first year. The Ministry of Health and Welfare is set to lift some restrictions on labelling and advertisement from April 1st, 2001, which should help the market expand further. The full potential of the Japanese health food market is estimated to lie around 1exp12 yen - provided that consumer confidence remains strong and is not undermined by exaggerated advertisement.

Olympus is developing DNA chip and DNA chip reader instrumentation, aiming to take part in the gene diagnostics market. A genome department will with initial staff of 50, recruited from present Olympus employees, will build on Olympus' experience in microscopy and micromanufacturing to enter the new market. Technologies that Olympus cannot manage on its own are to be tackled in cooperation with universities and research institutes abroad and in Japan. As a first step, Olympus has purchased 10% of the stock of a Dutch venture specializing in DNA chip development (パム ジーン) and struck an agreement with Evotec (Hamburt, Germany) to jointly develop a gene analysis system. Olympus hopes that its medical business will reach sales of 3exp10 Yen in 2005. (See also article 991220NB.68b)

Sankyo has secured access rights to Incyte's human cDNA data base. Incyte is believed to have sequenced over 90% of all expressed human genes. So far, 27 pharmaceutical companies in Europe and America are using Incyte's data base, but Sankyo is the first Japanese company to do so. Takeda has instead secured access to Celera's genome data base.

A research team at Mitsubish Life Science Institute under Toshiaki Noze (野瀬俊明) has succeded in generating mouse germ cells in culture from embryonic stem (ES) cells. ES cells which spontaneously differentiate into germ cells expres a novel surface antigen, Vasa. ES cultures are grown until they express Vasa on about 1/1000 cells. Culture is then continued under the addition of growth hormone, which expands the germ cell population to 1-2%. Germ cells were collected, transplanted into male mice and could produce sperm cells. It is under investigation whether these sperm cells can in fact fertilze an oocytes to generate normal animals. Noze aims next to differentiate ES cells into oocytes. A breakthrough revolutionize transgenic animal technology.

Under pressure from foreign competition, Takeda Pharmaceuticals is setting up a global computer network which will integrate its R&D data generated in Japan, Europe and the US. Based on the novel Japanese policy that research data obtained aboroad can be applied towards drug registration in Japan, Takeda hopes to speed up its drug development time from presently 8 to less than 5 years. In particular, Takeda hopes the new IT system will enable it to introduce its new drugs for promotion of osteogenesis, agains bronchial asthma and atopic dermatitis in 3-4 years' time simultaneously on the major world markets. Takeda's initiative is being seen as a reaction to foreign pressure: Foreign companies are making inroads in the successively liberalizing Japanese pharmaceutical market, backed by state of the art IT support from their headquarters. For example, Astra Zeneca of Britain is to introduce a new hyperlipidemia drug worldwide at the end of next year, with sales expected at 0.3exp9 US$ in Japan and 4exp9 US$ worldwide.

Alan Boots, CEO of the US pharma giant Pfyzer, expects the Japanese pharma market to consolidate to a maximum of five major groups over the next years. Pfyzer, he is reported saying, is continuing to strengthen its global position including M&A and will be ready to take accomodate Japanese companies under its umbrella.

Lynx Therapeutics, a Silicon Valley company lead by Sydney Brenner developing highly parallel tag sequencing technology, is giving an exclusive license to Takara Shuzo for using its technology platform in Japan, China, Korea and Taiwan. Lynx' technology is based on beads 5um in diameter which can be coated with DNA strands in such a way that each bead will be coated with many copies of one specific piece of DNA. For example, beads can coated with 100 000 independent cDNAs of an expression library in order to analyze the mRNA expression profile of a cell population of interest. Beads are subjected to a restriction endonuclease directed degradation process, and ~20bp sequence tags adjacent to the given restriction site are determined using fluorescent tags and laser microscopy. Thousads of beads, located in a microfluid chamber, can be observed under a single microscope to determine each sequence tag and thus generate an expression profile. Instead of cDNA, genomic DNA digests can be used to screen and compare several genomes and identify drug targets. Takara is planning to offer this new gene analysis service to other companies and is aiming to earn 10exp9 yen within 3 years. Lynx has now succeeded to spread its technology to all major markets, after creating the joint venture BASF-Lynx in Germany in 1997.

Oracle Japan is setting up a joint venture with a Tokyo genetics venture firm, Medivic, to offer a bioinformatics platform for genome data analysis to Japanese pharmaceutical companies. Oracle's US parent company has built Celera Genomics' system. With Medivic's scientific know-how, Oracle aims to become a major player in Japanese bioinformatics as well, envisioning contracts in the several hundred thousand to several billion dollar range apiece with more than five pharmaceutical companies within one year. An increasing drive in the industry to combine IT and pharma technology is evidet: In a competing deal, Daiichi Pharma and Fujitsu have recently agreed to cooperate in genome-based drug development.

Triangle Technology, a service enterprise founded in 1989 in Israel, by Daniel Eisenberg, a former professor at Harward Business School, is offering a comprehensive business service for Israeli technology ventures. Israeli ventures may turn to Japanese partners for their production facilities, sales organization, and investment capital. Japanese companies are increasingly interested in joint ventures to gain access to Israeli technology. Triangle's service includes (1) setting up a Japanese company as a legal entity, (2) personnel recruitment, (3) business strategy design, (4) investor and business parnter search. So far, Triangle was instrumental in establishing two comapnies in Japan: For Dealtime.com, a price comparison service, Triangle introduced investors such as JAFCO, Omron, Credit Saison, Mitsui Trading (三井物産), and scouted some personnel. For Printlife.com, Triangle set up a Japanese daughter company from scratch, including the recruitment of Ryu Nowatari, who headed a US venture subsidiary in Japan at the time, to run it, putting together the business team, defining the financial structure of the enterprise and giving advice on investment policy.

A group of 60 international experts has come together in Tsukuba for a two week session to assign functions to 20 000 mouse genes. The new genes are the preliminary result of RIKEN's cDNA sequencing project, at RIKEN's genome science center (理化学研究所ゲノム科学総合研究センター、林崎良英プロジェクトディレクター). Since 1995, RIKENS's team has isolated 70 000 - 80 000 of an estimated 100 000 mouse genes, of which 20 000 have been completely sequenced to date. The results of the present workshop shall be published and made accessible to the public in the beginning of 2001, after RIKEN has filed patents for those genes deemed valuable for medical purposes. The project's goal is to sequence all mouse cDNAs, and, beyond that, to investigate gene function.

Kirin Breweries' pharaceutical research center (医学探索研究所、群馬県高崎市) has generated mice which generate human antibodies. Koh Ishida's (石田功部長代理) team succeeded in 1997, after 5 years of research, in transferring a human chromosome fragment which contains the immunoglobulin gene locus to a mouse ES cell by cell fusion. A patent was awarded in March of this year, and the technology has been licensed to a US venture. Kirin has raised several hundred mice with humanized antibodies, and is now in the process of raising antibodies against a large number of therapeutic targets, including tumor antigens.

000810NS Itochu: Bio Ventrue Fund

Trading giant Itochu preparing to set up a fund of 5-10 exp 9 yen to invest into bioscinece ventures. 50% of funds shall be from Itochu, the other half from Japanese and American pharmaceutical and food companies. The fund shall invest into 20-30 startup companies in Europe and America, focusing on new pharmaceuticals and on devices for gene analysis. In lending support in selling their products, Itochu hopes to actively guide those ventures to the stock market and recover the investments within 3-4 years.

In a feature on biotechnology in Japan, the Canadian embassy news letter points out the Japanese pharmaceutical industry's strong drive to internationalization: With a 7% decrease in official pharmaceutical prices introduced in April 2000, and Japanese companies' technology and basic research activity lagging behind other countries, Japanese companies are forming partnerships abroad both to prop up their technology and sales. Moreover, with the official adoption of ethnic equivalency guidelines, drugs approved abroad may be sold in Japan provided that the manufacturer willnot be influenced by dietary or ethnic variables related to Japan. This "bridge testing" can usually be completed within a year. Japanese companies thus find it increasingly attractive to conduct clinical trials abroad and register a drug in Japan only after it has been approved abroad. Examples of recent alliances are:

Taisho and Arena Pharmaceuticals, a US venture, plan joint research on G-protein coupled receptors

A Zeria Pharmaceutical Co. subsidiary and Texas A&M University will conduct joint research on fibroblast growth factor

Sumitomo Pharma entered a 5 year cooperation on Alzheimer treatment with the Swedish Karolinska Institute

Fujisawa invested in Adherex Technologies, a Canadian start-up in cancer research

Bozo Pharmaceutical is conductin clinical testing at Anapharm, a Canadian pharmaceutical company

[The MRAs (mutual recognition agreements) which mandate the acceptance of foreign data for drug approval have yet to be extended to diagnostics and medical devices.]

Contributed by Armin Rump
(December 01st, 1999)

Patent Offices: Different Standards

Four patents on cDNA seqeunces were issued by the US Patent and Trademark Office to Sagamiono Chuken (相模中央科学研究所、神奈川県相模原市), a research center funded jointly by Toso (東ソー) and nine other major chemical companies. The genes were part of a set of 120 gene sequences identified at Sagamiono Chuken and submitted for pattenting in 1992. The function of the genes was estimated by sequence homology, without experimental confirmation. Such data is insufficient to obtain gene patents in either Japan or Europe. US authorities are criticized for issuing patents too easily in order to give US enterprises, who are leading in gene sequencing, an advantage over foreign firms who might want to identify the funciton of known genes. Patenting of incompletely characterized genes is seen as a major hazard to further research on those genes. The three patent offices (US, EU, Japan) entered negotiations towards harmonization of gene patent policy this June.

A research team at Osaka University (織谷健司, 松沢祐次) announced the discovery of a novel cytokine with high homology to interferones. Interferon alpha and beta are widely used to treat leukemia and hepatitis. In mouse experiments, the new molecule is reported to share the antiviral and antitumor activities with its family members, but lack the side effect of suppressing erythropoiesis.

A scientific meeting at the Institute of Medical Science (IMSUT), University of Tokyo pointed out recent progress in the dynamic field of regenerative medicine, stem cell biology and animal cloning. Alan Colman (research director, PPL Therapeutics, UK) reported improved methods for animal cloning and the generation of transgenic cloned pigs and sheep, while Yukio Tsunoda (Kinki University) cloned cattle. Cloning still has a low success rate and frequently leads to malformed animals, most likely to incomplete nuclear reprogramming. Research on nuclear reprogramming and DNA methylation is yet far from being understood in detail, as reported by Rudolf Jaenisch (MIT). Progress was reported by several researchers in understanding and manipulating the differentiation of mouse embryonal stem (ES) cells: Progenitors of neurons, blood cells and endothel can be grown in culture. However, research on human ES cells is proving tricky: These cells have different cytokine requirements from mouse cells. In contrast, researchers on organ-specific stem cells reported progress towards clinical application: Human mesenchymal stem cells from bone arrow could be grown into implantable bone tissue on a resorbable ceramic support (Daniel R. Marshak, Osiris Therapeutics, USA), and mouse neuronal stem cells could be grown not only into neurons but into virtually any tissue (Urban Lendahl, Karolinska Inst., Sweden). The vision of stem cell therapy as pointed out by Oliver Bruestle (Bonn University, Germany) is autologus organ recovery: The nucleus from the cell of a patient's body is transplanted into a denucleated oocyte. The oocyte environment then reprograms the nucleus and makes possible the generation of ES cells which are genetically identical to the donor patient. If necessary, the ES cells can be genetically modified. Then, the cells are differentiated into progenitors of the needed organ and transplanted back into the patient to regenerate the lacking tissue. In practice, this vision is far fetched. But the first applications of organ specific stem cell based therapy, and thus the new concept of the "Cell as a Drug", as Kenichi Arai (IMSUT) coined the phrase, are swiftly progressing towards clinical trials.

Contributed by Armin Rump
(December 24th, 1999)

Industry: Pharma is Strengthening and Focusing Research

Faced with an inland market which is shrinking at 7% a year (as of April 2000), Japanese pharmaceutical firms are aiming to increase their stature on other major markets. In order to position themselves in the emerging world of giant global players, pharmaceutical companies are abandoning their domestic strategy of covering the entire spectrum of products and are instead starting to focus their research effort on strategic indications in their area of competence. Increased specialization is expected to lead to increased complementarity and thus to increased merger activity within the Japanese pharmaceutical industry. Many companies are particularly pushing both their research activities and clinical trials in the US: Fujizawa is doubling its US subsidiary budget, strengthening its immune control research and clinical trials; Sankyo is pushing ahead with its clinical trials for diabetes and hypertension in America; Enogi, as a late comer, is just establishing a reserach facilities in the US; Takeda and others are cooperating with US companies on genome analysis. Clinical trials are costlier in the overseas than in Japan, but they also proceed faster. The total research budget of the 10 largest Japanese pharmaceutical firms for the fiscal year 2000 is 474exp9 Yen or 12.2% of 1999 sales.

Research Budget and Focus10 largest pharmaceutical companies, in 1exp9 Yen Percent increase: Yearly budget plan to March 2001 over fiscal year 1999/2000 budget.

Company

Research Budget

Percent Increase

Focus / Strategy / Remarks

Takeda Pharmaceutical Industries

89

15.3

Diabetes, strengthen development

Sankyo

73

13.4

Increase clinical trials, strengthen product pipeline

Yamanouchi Pharmaceuticals

56

2.2

Had record budget last year

Ezai

53

13.5

CNS (Alzheimer), PNS

Fujizawa Pharmaceutical Industries

51

11.8

Strengthening US research subsidery

Chugai Pharmaceuticals

42

5

Research budget 20% of sales

Daiichi Pharmaceuticals

40

11.6

Push clinical tials

Enogi

29

8.1

Antibiotics, InflammationEstablish research facility in USA

Welfeid

20

6.2

Exploit research results

Tanabe

20

2.6

Diabetes research in cooperation with US venture

Total

473

10.1

Speed up clinical trials, invest in genomics, focus on indications of competence

PharmaDesign, a bioinformatics startup founded in January 1999 by a group of researchers from Yamanouchi Pharmaceuticals and headed by Toshio Furuya (古谷利夫), has entered a research cooperation with Tanabe Pharmaceuticals. PharmaDesign identifies drug targets through genomic DNA analysis. Development of drugs and clinical trials will be carried out by Tanabe. A contract to cooperate on DNA-chip based screening is under discussion. PharmaDesign is seeking investors for an increase of capital in July 2000, and is planning an initial public offering in 2001.

McKinsey & Co. Japan (President: 平野正雄) has begun to consult venture capital companies. McKinsey offers not only advice on company valuation, such as how to evaluate business plan, cash flow etc. of startup companies, but through the venture capitalist also gives support to the startup in business strategy, recruitment etc. Unlike other consultancies, however, McKinsey is not consulting startup companies directly. According to McKinsey, Japanese venture capital firms are good at forming funds and implementing IPOs, but have little experience in guiding a business to grow up to that point.

The Korean financial crisis in 1997 lead to down-sizing of the giant conglomerates, leaving workers laid off, office space vacant, and policy makers looking for a new start. This environment has been very conductive to new business startups - particular in the IT sector. In March alone, 4200 new companies were created in the six major cities, twice the number of a year before. The first companies have been expanding into Japan and other Asian countries. The KOSDAQ stock market for small high tech companies, opened in July 1998 as the first of its kind in Asia, has supplied funds to new business just at the right time. The word is that Korean internet business is one year ahead of its Japanese counterpart (apart from hand-held devices, where Japan is leading).

Takara Shuzo is setting up a genomic sequencing center called Dragon Genomics in Kuso-Cho, Mie Prefecture. Worth US$ 60mio., the center sequencing facility will have half the capacity of Celera Genomics and the largest capacity in Asia. Takara will install sequencing equipment jointly developed at RIKEN, Tsukuba, and Shimadzu. Sample preparation will be conducted by Takara Biotechnology in Dalian, China, and data analysis will be done at Takara's research center in Shiga, where a new computing facility will be set up. Takara is currently seeking a partner with experience in bioinformatics. Takara will not compete in human genome sequencing but rather focus on important microorganisms, particularly marine ones. With the government budget for genomic and postgenomic reserach increasing, other companies are also expanding their sequencing facilities. Shimadzu is planning a sequencing service as a vehicle to sell its instruments, while Hitachi set up an entire Life science group last September, chaired by Hiroya Taguchi. Hitachi Life Sciences will initially concentrate on sequencing and database services for Japanese companies and organizations, but hopes that it can enventually position itself as a global player in bioinformatics.

0000424NB.3 Chugai: SNP Analysis Method

Chugai Diagnostics is cooperating with Hiroyuki Yutani and Ikebukuro Kazunori at RCAST (Research Center for Advanced Science and Technology), Tokyo University, in a NEDO-sponsered project to develop a fast and low-cost SNP analysis system. The RCAST team has developed a technology called Unilateral Protruding DNA technology (UPD) which facilitates the separation of annealed complementary DNA strings. The mechanism of UPD was not revealed. UPD allows faster amplification of DNA than conventional PCR, which requires temperature adjustments to melt the complimentary DNA strands apart. Once amplified, DNA of interest shall be hybridized to a set of probe on a chip-like support. The hybridization signal indicates the sequence of the analyte DNA. Chugai aims at processing one sample in a mere six minutes for a cost of 1000-2000 yen a piece, or even less than 100 yen in mass production.

Contributed by Armin Rump
(December 27th, 1999)

Suntory: Research Center in Boston

The major Japanese pharmaceutical companies operate research facilities not only in Japan but also in the US or Europe. Suntory, a brewery and beverage company with rather small pharmaceutical operations, is following suit and opening "Suntory Pharmaceutical Research Laboratories" in Boston with a staff of 15 (to reach 50) and a capitalization of 3.5 mio. US$. The center will focus on circulatory research.

Canon is developing a DNA spotter machine based on its ink jet printer technology: A heater attached to a small nozzle filled with a given DNA solution causes the water in one spot of the nozzle to evaporate. As the gas espands, a drop of liquid is expelled from the tip of the nozzle on to a glass slide. Drops of 24 picoliter, with a diameter of 100 micrometer, have been created. Canon expects to shrink the drop diameter to 24 micrometer and spot 20 000 drops per square centimeter. (Canon 中央研究所山本信子 in cooperation with 東京慈恵会医科大学)

0000410OT.51 Catch-up Strategy

In a symposium intended to think about how to create genome-based business and foster innovation in Japan, the key speakers drew a picture of Japan's current situation as follows:

Katsuhiro Utada, chairman of the Biotechnology Industry Association, explained that Japan has missed the development of modern biotechnology, based on recombinant DNA technology developed in the USA in the 1970s, because Japan was too much focused and successful in microbiology and fermentation technology. Japan has never caught up with the US, as may be illustrated by the following comparison: The Japanese marked for recombinant technology-based products reached 1.2exp 12 Yen in 1998, having grown an average yearly 22% since 1988 - while the US market volume was 1.9exp12 Yen. The number of bio venture companies in Japan was 100, in the US 1300. In Japan, the governmental research investment was 0.5exp12 Yen, 35% of Japan's total research expenditure in biosciences. The US government spent 2.8exp12 Yen, 50% of total. This shows that the reason for Japan's lag is insufficient research funding and the lack of an efficient system of technology transfer which can research results into products. As the five ministries concerned with biological research became aware of this situation, they created a joint "basic guideline for the creation of a biotechnology industry" on January 29, 1999, and in March 1999 set up a "life science council" which came up with a set of recommendations to push basic research, nurture the creation of new venture enterprises, strengthen patent applications, and to sweeten the public opinion through PR work.

Kenichi Arai, director of the Institute of Medical Science, University of Tokyo, and chairman of the Asian section of the International Molecular Biology Network (A-IMBN), illustrated that Japan lacks 'translational research' which translates results from academic laboratories into clinical applications. On one hand, only few of the major life science research centers are equiped with a research hospital. One reason for this split is that the funding authority for research labs and hospitials lies in different ministries. On the other hand, venture companies that have sprung out of academic labs in the US because inventors wanted to take their inventions to the market are lacking in Japan. Some obstacles to the birth of venture business in Japan are:

The hierarchical organization of reserach in Japan which gives young reserachers little control and rights to the intellectual property they create

The structure of research organizations and funding, which gives much power to ministries rather than to reserachers

The lack of incentives to become independent, as well as the lack of good facilities for translational research which could become incubators to start up companies

The lack of appropriate venture funds, of a labor market for researchers and thus a lack of a promise of a way out of a failing venture business for researchers

Arai propsed to create a 'Tokyo Bay area genome therapy development network' as a network with great financial autonomy similar to the NIH. This network would incorporate public research centers, universities, clinics and start-up companies, be funded by both public money and venture capital, and would promote communication and competition between all entities.

Seiichiro Yonekura, director of the Hitotsubashi University Innovation Research Center, pointed out a strong correlation between a county's investment in education and its economic competitiveness. According to Yonekura, pre-war Japan (Meiji era) poured generous funding into higher education and quickly caught up with the educational level of Western countries. In post-war Japan, however, funding for higher education decreased: In 1985, Japan spent only half as much on higher education as the US (Japan 0.36% of GDP, US 0.75%, England 0.97%, Germany 1.03%). This lead to a lack in human capital and a stagnating innovativeness in Japan today.

0000410NB.1 Takeda: Access to Celera's database

On March 30th, Takeda was the first Japanese company to reach an agreement with PE, Celera's parent firm, about the use of Celera's genome database. Takeda will have non-exclusive access rights to human genome, cDNA and SNP data, to Drosophila and mouse genome seqeunce, as well as to Celera's bioinformatics tools for five years. Takeda will have the right to apply for patents, develop and market products based on Celera's data without paying any royalties. Financial terms of the contract were not disclosed. Takeda will use the genome data to develop more effective drugs from its its ongoing orphan receptor and ligand research. Furthermore, Takeda is considering to search for novel enzymes and diseaese-related genes.

Klotho is a gene of unknown function cloned at Kyowa Hakko in 1997. Klotho-deficient mice display a rapid ageing phenotype including a decreased life span, pulmonary enphysema, artheriosclerosis and osteoporosis. PHENOBASE is a database owned by Gemini Genomics, London, which links single nucleotide polymorphisms (SNPs) to human phenotypes such as blood sugar level. PHENOBASE is based on genomic material from 10 000 healthy twins evaluated for 500 physiological variables. Kyowa Hakko reports the identification of several PHENOBASE SNPs in the Klotho gene (both in introns and exons), some of which relate to distinct metabolic phenotypes. The 5` end of klotho could be linked to sugar, neutral fat and calcium ion concentration in the blood. SNPs in near the 3' end were related to body fat and breathing volume. Details on particular SNPs have not been disclosed while both companies jointly apply for patents.

Monsanto agreed to donate its draft sequence of the rice genome to the international rice genome sequencing program (IRGSP) lead by the Japanese ministry of agriculture's National Institute of Agrobiological Resources. Monsanto's data comprises mainly sequences form a 3500 clone BAC (bacterial artificial chromosome) library produced at Leroy Hood's lab at the University of Washington, Oregon. As the international consortium's work has been based on a PAC (P1 phage atrificial chromosome) library, it is hoped that both data sets will complement each-other and speed up the project considerably. The countries participating in IRGSP are Japan, USA, England, Korea, China, Taiwan, Thailand, France, Canada and India.

At Nagoya University Hospital (名古屋大学医学部脳神経外科教授吉田純氏), a malignant glialoma patient is undergoing treatment with an interferon beta gene construct. The gene is being applied in a positively charged mulitlamellar liposome. The treatment was applied directly to the tumor in 5 places of the brain. The patient recovered well from the 12 hour surgery and is due for five additional rounds of surgery to repeat the treatment and monitor its success.

With approval from the ethical council, Prof. Masafumi Matsuo is planning to start clinical testing of an antisense DNA treatment for Duchenne type muscular dystrophy (DMD). DMD patients cannot synthesize dystrophin, a 427 kDa muscular transmembrane protein that is thought to form a plasma membrane undercoat. DMD patients suffer a progressing decay of muscle tissue. Becker-Type muscular dystrophy (BMD) is a milder form of the disease where the amount of dystrophin synthesized is reduced to around 10% of normal. The dystrophin gene is prone to mutations due to its sheer size of 53 exons spread over 3 mio. base pairs. A frequent cause of DMD is the absense of exon 20 which is 242 nucleotides long. Since three nucleotides code for one amino acid and 242 is not divisible by 3, the lack of exon 20 leads to a shift in the 3 nucleotide reading frame and thus to synthesis of a nonsense protein. Dystrophin exon 19 contains 88 nucletides. Since 88 + 242 = 330 = 3 x 110, the absense of both exons 19 and 20 would not result in a frame shift but to the synthesis of a slightly modified dystrophin protein, lacking 110 amino acids in the middle. Exon 19 contains a short nucleotide sequence which is necessary for the proper recognition of exon 19 by the splicing machinery. Hiding this recognition sequence with an antisense oligonucleotide is thus thought to cause skipping of exon 19. Matsuo plans to inject such a short antisense nucleotide intravenuously (2mg per kg bodyweight, once a week 4 times). [The resulting immune response is not considered in the article.] Experiments in a dystrophy model mouse confirmed the uptake of the oligonucleotide into 20% of muscle cells. Because the model mice do faithfully model the human DMD intron 19/20 architecture, the ultimate test can only be perfomed in human patients. It is hoped that the treatment will lead to an amelioration of symptoms to resemble BMD. A cure of DMD is not expected due to the limited efficiency and the lack of 110 amino acids in the protein.

Microsatellite DNA are repeats of 2-5 base pair motives scattered throughout the genome. The human genome is estimated to contain about one million microsatellite regions, one tenth of which are polymorphic (different in length, i.e. number of repeats, between individuals). Those microsatellite polimorphisms can be interpreted as genetic markers, identifying the region of a disease-causing gene, for example. SNPs (single nucleotide polymorphisms) are thought to cause or contribute to many inheritable diseases. Companies worldwide are making great efforts to develop DNA chips which can readily identify disease-causing SNPs. Thought of as genetic markers rather than a direct cause to disease, the 10 mio. or so SNPs show a variety that may render diagnosis very complex. Less abundant markers - such as microsatellite polymorphisms - may be helpful as a first step tool to pin down a genomic region of interest, which can then be checked for SNPs. Due to their repetitive nature, microsatellite DNA does not lend itself for conventional DNA-chip analysis. A research team at Tokai University (東海大学医学部分子生命科学、猪子英俊氏、田宮元氏) is developing a system to analyze microsatellite DNA by mass spectroscopy (MALDI-TOF) and catalogue polimorphisms in a data base. Several companies are cooperating in the project: Shimadzu is developing a system to analyze molecular mass at appropriate precision and throughput. Chugai Pharmaceuticals is planning to develop a specialized DNA chip for microsatellite polymorphism analysis, and Mitsui Information is creating an easy-to-use database.

'Biofrontier Global Investment Group' (バイオフロンテイア グローバル投資事業組合) was created on March 10th by 22 companies in the pharmaceutical, engineering and financial fields (大正製薬 セリア新薬工場 住友商事 サニーヘルス ファルコバイオシステムズ 住友電工 富士通 エース証券 ジャフコ etc.) and endowed with 5.5exp9 Yen (ca. 50 mio US$) to be invested in biotechnology startup companies. The organization operates a public company (Biotechnology Partners, CEO Yoshihiro Otaki 大滝義博) which invests the funds for a ten year period in biotechnology startup companies. Two bio investment groups had been founded previously in Japan with a combined fund of 1 bio. Yen. New is that Biofrontier offers not only capital but also offers advice and help in raising up the new company until it goes public. Through its great variety of parent companies, Biofrontier can offer competent help and partners for cooperation in a variety of areas. In particular, the participation of エース証券 (Ace Securities?) creates a bridge to the NASDAQ stock exchange.

Brassicaceaen vegetables (cabbage, rape, radish) posses a mechanism to prevent self-pollination, which hinders hybrid seed development. Self-recognition is mediated by the S locus, a highly polymorphic genetic locus which contains three genes that determine the 'self' phenotype: S receptor kinase (SRK), S locus glycoprotein (SLG) and SP11 (Nature 403p931, PNAS 97p1920) At the Research Institute for Seed Production Co., Ltd in Sendai, a semicommercial research enterprise sponsored by an industry-government consortium (社長渡辺穎悦氏), it was shown demonstrated that SRK is the self-incompatibility conferring receptor on the pistil and SP11 is its ligand, expressed in the pollen wall. SLG seems to have accessory function. By transfection of SRK from a different species of Brassicaceae, pollination could be prevented. The research will now focus on the molecular architecture of SP11/SRK recognition as well as on the signal transcduction pathway triggered by SRK which leads to inhibition of growth of the pollen tube. Identification of the cognitive molecules in self-incompatibility can be can be exploited to produce novel seeds. The only mechanism to date to overcome self-incompatibility is a proprietary technology by Aventis using RNase under the control of a pollen mother cell specific promoter.

Takara acquired a 50% share in the Korean company ViroMed. ViroMed was founded itn 1996 by Synyong Kim, professor of molecular biology at Seoul University, and has 13 emplyees. ViroMed owns a retroviral vector, pDON-AI, which shows high transfection efficinecy and clinical safety at the same time. Takara will combine a peptide transfection enhancer RetroNectin, developend jointly wiht the University of Indiana, with pDON-AI. Korea is a convenient place to develop gene therapy: Most relevant US patents which would hinder the research are not valid in Korea and other Southeast Asian countries. Moreover, the Korean government is now developing guidelines for gene therapy. With the legal framework in place, Takara hopes to proceed to clinical trials at the end of this year.

On a press conference in Tokyo, David Ebsworth, director of Bayer's pharmaceutical division, explained his company's progress in drug development based on genome information. In a cooperation with Millenium Pharmaceuticals since Sept. 98, Bayer obtained 225 drug targets. 26 of those targets have so far been investigated, and one lead product is emerging. Secondly, Bayer has cooperating with Lion Biosciences, a German bioinformatics company, since June 1999. The cooperation has brought Bayer's own bioinformatics up to date, and has given Bayer 500 targets for therapeutics based on genome sequence analysis. Bayer's pharmaceutical sales in 1999 were up 15% worldwide and up 26% in Japan, according to Ebsworth. The reserach budget was 18.6% of sales revenues, with over one third being spent on basic research.

Ethancherpt (US trade name ENBREL) is a protein which binds to and blocks the 75kDa TNF receptor. Developed by US companies Immunex and Wyeth-Ayerst, this antirheumatic drug was approved by the FDA in November 1998 and in the EU in Feb. 2000, and had a sales volume of 370 mio. Dollars in the US in 1999. 日本ワイスレダリー is now carrying out phase 1 clinical trials to get ethancerpt approved in Japan.

At the meeting of the Molecular Biology Association of Japan in Fukuoka, RIKEN-GSC (理化学研究所ゲノム科学総合研究センター) and the Genome Analysis Center, IMSUT (Institute of Medical Science, University of Tokyo) presented a program which can predict open reading frames of bacterial genomes with high fidelity. The software, called YEBISEN, on average predicts 97% of reading frames and 91% of translation start sites correctly - more than "Genemark, hmm", the best program for this purpose so far. YEBISEN is easy to use and comes with integrated tools for further analysis such as motive search. RIKEN is hoping to develop a software for eukaryote genome analysis by this spring, and to use it for the analysis of the human chromosome 21.

On behalf of the Kuwaiti government, PLC (石油産業生活センタ) is conducting experiments to clean up soil which was contaminated in the Gulf War. In cooperation with the groups of Profs. Obayashi, Koyanagi and Matsumoto of Tokyo University, the project was initiated in 1994. 7 out of 20 petrol degrading bacterial strains are added to the soil along with fertilizer. The reaction is monitored by genetic markers as well as catechol ring opening activity. PLC is also developing physical methods to clean up the soil. The experiments are scheduled to be concluded in March 2000, and the Kuwaiti government will then decide how to proceed with the cleanup on a large scale. Cleaned soil is being used to grow trees in otherwise unfertile desert regions. The plants are being monitored for accumulation or toxic effects of petrol remnants in the soil.

Non-fluorescent detection of DNA hybridization on a gene chip facilitates automation of the procedure through elimination of the fluorescent labelling reaction of the probe. In order to facilitate large-scale pathogen screening in blood banks, Olympus is developing a fully automated device to detect viral DNA in blood serum. DNA is separated from proteins on an ultra-small electrophoresis gel (4 x 4 cm x 30 micrometer), amplified in a tiny silicon PCR chamber, and hybridized to a DNA chip for detection. Hybridization results in an increased thinckness of the film of DNA on top of the chip. Using a double light beam and an elipsometer, this increase can be detected as a phase difference in comparison to a reference chip. Biostar, a Canadian company, uses the same optical technology to detect protein binding.